Kiley sentenced to long jail term for part in $194M Ponzi scheme
A former radio show host in Minnesota who dispensed financial advice is likely to spend the rest of his life in jail.
Patrick Kiley, 75, was sentenced to 20 years in prison Monday by a Minnesota federal judge for his participation in a Ponzi scheme attracted more than 1,000 victims who lost a total of $194 million. Parole is not offered in the federal justice system.
In June 2012, Mr. Kiley was convicted of 12 counts of wire and mail fraud, one count of conspiracy to commit wire and mail fraud and two counts of money laundering. Three co-defendants were sentenced to jail terms of varying lengths earlier this year. The four were ordered to pay more than $155 million in restitution to their victims.
Between 2005 and November 2009, they solicited investments for foreign currency trading, promising risk-free returns of 10.5% to 12% annually. The money was put into a program managed by Trevor G. Cook, who was sentenced in August 2010 to 300 months in federal prison for his role in the scheme.
Initially, Mr. Kiley alleged that he was hoodwinked by Mr. Cook. He also sued Minnesota news organizations for defamation. Mr. Kiley promoted the investments through his former radio show, “Follow the Money,” which at one time was syndicated on 200 stations nationwide, including the Worldwide Christian Radio network.
“On those programs, he regularly warned listeners to avoid financial ruin by giving their life savings to his company for investment,” the U.S. Attorney’s Office for the District of Minnesota said in a statement.
Mr. Kiley’s attorney, John Lundquist of Fredrikson & Byron P.A., declined to comment.
This is the second recent case of alleged financial fraud involving a radio personality. Last week, San Diego financial adviser Ray Lucia Sr., host of a nationally syndicated program, was fined $50,000 and had his advisory registration revoked by an administrative-law judge.
Financial regulators are zeroing in advisers — and those who hold themselves out to be advisers — who take to the airwaves and social media to offer investment guidance, according to Patrick Mahoney, owner of the Law Office of Patrick Mahoney.
“You can’t get much more unsophisticated [in investing] than the average Joe listening to the radio,” Mr. Mahoney said. “It’s easier now more than ever for an unqualified person to give advice. We’re in a really unprecedented environment.”
U.S. District Judge Michael Davis criticized Mr. Kiley for using religious affiliations to lure victims, according to a July 15 report in the Minneapolis Star Tribune.
“You brought more than $140 million into the scheme,” Mr. Davis was quoted as telling Mr. Kiley at the sentencing. “Let it be said, your age does not trump what you did here. You were the engine that kept the Ponzi scheme going.”
